California passes laws targeting PBMs, private equity

California Gov. Gavin Newsom signed into law a series of bills last week that address some of the most hot button topics in healthcare, including the practices of pharmacy benefit managers and private equity firms.

The legislation is the latest example of state lawmakers taking healthcare policy into their hands, following stalled efforts at the federal level.

Some laws in the package will reduce payers’ prior authorization requirements for commonly approved procedures or strengthen hospitals’ charity care programs — which is intended to help patients receive medically necessary care faster and at an appropriate cost.

However, the most significant reforms impose stricter guardrails on some of healthcare’s most controversial players: pharmacy benefit managers and private equity firms.